Brendan Kenneally (Fianna Fail)

I welcome the Minister of State, Deputy Brian Lenihan, to the House. I am glad to have the opportunity to speak in the debate. The Minister of State will be getting the point in stereo, so to speak, as I intend to reiterate the points made by my colleague from Waterford, Senator Cummins. In contributing, I will concentrate on the issue of funding, particularly with regard to how Waterford has been discriminated against. However, at the outset I will refer to the Fottrell report.

I agree with the thrust of the Fottrell report with regard to increasing the number of medical students, particularly Irish students. The system contains a high proportion of non-EU medical students. These students are very welcome and no-one has a problem with them. We are delighted to see them come to Ireland and hope they will continue to do so. However, we need more Irish students in the system because medical professionals, particularly those who go on to become consultants, tend to travel the world to gain experience before eventually settling down. It is more likely they will settle down in their country of origin than anywhere else. For that reason, it is important that we have more Irish medical students, who will hopefully enter our medical system, which would be a major help to our hospitals. More and more funding is being pumped into the health services but, unfortunately, difficulties remain. This is one step which will help to resolve the problems.

I agree with the new methods of medical training. The necessity to achieve 600 points in the leaving certificate in order to study medicine leads to a rat race. It is now proposed that there should be different means of entry. We all know people who would not be able to achieve such high leaving certificate results but would probably make great doctors. I welcome the new methods and hope they will be put in place at an early date.

I recently considered the statistics with regard to third level funding in the various cities. Of the five cities, I will exclude Dublin because it is so much bigger than Cork, Galway, Limerick and Waterford that it should not be included in any comparison. In 2005 recurrent expenditure was €154.6 million in Cork, €114.9 million in Galway, €86.2 million in Limerick and €33.5 million in Waterford. That funding goes into the local economies and it is easy to see that Waterford city lags behind in this regard as, of the four gateway cities, just 8.6% of expenditure goes to it.

In the same year, capital expenditure was €34 million in Cork, €13.8 million in Galway, €11.4 million in Limerick and €1.7 million in Waterford. Therefore, just 2.8% of capital expenditure went to Waterford, which is not good enough. I realise that capital expenditure can vary from year to year because projects may be at their peak one year and taper the next. However, if one examines the figures for any past year, the other three cities were always ahead of Waterford in terms of expenditure.

The most important figure is recurrent expenditure because it relates to the amount going into the economy of those cities every year. Waterford lags badly behind because it does not have a university of the south east and, as a result, the city and the region suffer.

Most people believe the south east to be a prosperous region. That is not the case. The latest data from the Central Statistics Office suggest that the per capita income in the south east is 88% of the national average. The only region with a lower percentage is the Border region.

Waterford Chamber of Commerce recently commissioned a study by Goodbody Economic Consultants which tried to establish the current economic performance of the south east and identify where action is needed, set out the role of third level institutions in enhancing national and regional economic performance, review the international literature to illustrate the direct and indirect impact of universities on the regions, estimate the current and future impact of a university on the region given a number of scenarios and illustrate the direct and indirect impact that a university could have on the region. Considering the starting point and the economic data, the performance is poor. For example, the number of admissions to university from Waterford people is 25% fewer than from the west. Some 22% of Waterford people continue with higher education compared with a national average of 30%.

Such statistics must tell somebody something. We need a university and we will not attract private funding until such time as we have one. The Minister for Education and Science, Deputy Hanafin, has in the past trotted out the argument "What's in a name?", and pointed to the position of the London School of Economics and the Massachusetts Institute of Technology. That is a totally different scenario. Those institutes are able to attract huge research grants from the public sector and more particularly the private sector. As we do not have a university, we are not able to do that. People from the south east make up 11% of the country's population. We attract 0.69% of higher education grants. It is no wonder we tend to fall behind other cities.

Another measure of what is available in an area relates to the types of jobs there. Managers and professionals in the workforce account for 40% of the total in Dublin, while in Waterford they account for 28%. Only 5% of all graduates find employment in the south east. Some of the conclusions from the report I have been referring to include that the south-east region has underperformed, as I have proved, relative to other regions through the 1990s. This is particularly so with regard to the west, yet we always hear the cry from the west about how it is suffering, and it is still an Objective One region.

Significant additional investment is required if the south east is to participate fully in national economic growth. Underinvestment is reflected in comparatively low income levels, low levels of employment in the high tech sector and in business services. It is also reflected in relatively low educational qualifications among the region's population.

One of the key remaining areas of weakness is the low level of investment in higher education within the region. This weakness is particularly significant in the context of the knowledge economy that Ireland is striving to become. The attainment of a knowledge economy is now a key policy goal at EU, national and regional levels. The development of a university within the south east is a key policy objective for the region. The role and resources that a university would bring to the region would lead to the creation of over 700 jobs over the next five years. They would generate an additional €32 million within the local and regional economy. The region would have a substantial new driver of economic development.

Many countries throughout the world have initiated substantial regional development as a result of creating a university. Examples include Denmark, Sweden, Austria, Poland and Finland. Higher education participation, attainment and accessibility would increase with the provision of a university, and this would translate into the south east being a more attractive region for inward investment. The resourcing of research and development would attract substantial funding from national and international sources and provide a flow of new technologies and innovation into the region. Commercialisation of these activities would result in new knowledge industries emerging in the south east.

A university would instil a sense of pride in the region and provide a renewed source of cultural identity and development. The downward trend in economic and social performance would be redressed, and by increasing the attractiveness of the region for inward investment, the area could contribute more substantially to the national economy. The university would have greater flexibility in dealing with the needs of the region. It would attract new partnerships and a new range of investments, and it would create a potential for private funding and a critical mass impact. The university could rely more on private funding and reduce the dependency on the Exchequer, thus contributing at national level while creating a more autonomous learning region. What is good for the south east will be good for the State.